____________ is a method that spreads the depreciable value evenly over the useful life of an asset.

SLM

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DDB

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WDV

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None of the above

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Solution

The correct option is A SLM
There are various methods of charging depreciation on assets. Most commonly used methods are straight line method and reducing balance method.

Under SLM method, depreciation is charged on the original value of the asset every year. Under this method that spreads the depreciable value evenly over the useful life of an asset.

For example:

Original cost at year I Rs.10000
Less: Depreciation @10% for year I Rs. 1000
------------------
Book value at the beginning of year II Rs.9000
Less: Depreciation @10% for year II Rs.1000
-----------------
Book value at the beginning of year III Rs.9000
Less: Depreciation @10% for year III Rs. 1000

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Similar questions

___is a method of depreciation, in which the cost of the asset is spread uniformly over the life years by writing off a fixed amount every year, where as in ___ method of depreciation, a fixed rate of depreciation is charged on the book value of the asset over its useful life.

Under which depreciation method the amount of depreciation expense remains same throughout the useful life of a fixed asset?

Q. To be classified as a depreciable asset the useful life should be ___________.

Q. _______ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time of obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined.

Q. __________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."

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